Legacy Housing Corporation (LEGH) CEO Kenneth Shipley on Q4 2018 Results - Earnings Call Transcript

|
About: Legacy Housing Corporation (LEGH)
by: SA Transcripts
Subscribers Only
Earning Call Audio

Legacy Housing Corporation (NASDAQ:LEGH) Q4 2018 Results Earnings Conference Call April 9, 2019 11:00 AM ET

Company Participants

Curtis Hodgson - Founder & Chairman

Kenneth Shipley - Founder & CEO

Jeffrey Burt - Chief Financial Officer

Neal Suit - General Counsel

Conference Call Participants

Alex Rygiel - B. Riley FBR

Mark Smith - Oak Ridge Financial

Ian Ellis - MicroCapital

Operator

Good day, ladies and gentlemen and welcome to Legacy Housing Corporation's Earnings Call regarding 2018 Financials. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder today's conference may be recorded.

I would now like to turn the call over to Mr. Curt Hodgson. Sir, you may begin.

Curtis Hodgson

Good morning, everybody and thank you for joining us on our first call and realize that this is our first call. So we are going to be learning as we go ourselves. I've been tasked with some housekeeping words here which I'm going to say before I begin my prepared comments and those house - those task are before we begin I remind our listeners that management's prepared remarks today will contain forward-looking statements which are subject to risk and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore the company claims the protection of the safe-harbor for forward looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations and therefore we refer you to a more detailed discussion of the risk and uncertainties in the company's annual report filed with the Securities and Exchange Commission.

In addition any predictions as to the company's future performance represents management's estimates as of today's call. Legacy Housing assumes no obligation to update these projections in the future unless otherwise required by applicable law.

So as I said before welcome to our first ever earnings call for Legacy Housing. Obviously 2018 was an exciting time for me and for our company. We were pleased with our 2018 financial results which resulted in $161 million in gross revenue. The highest annual revenue ever generated by Legacy in a year in which we spent considerable time, resources and energy in our successful effort to complete our public offering. The company sold 3950 homes sections in 2018 compared to 3274 in 2017, an increase of over 20%.

Put in terms of complete homes, we sold 3392 units in 2018 compared to 2900 in 2017, a 17% increase. We also increased the average selling price of our products to approximately $41,000, as opposed to approximately $38,000 in 2017. This was attributable to sales price increases in 2017, as well as more sales being made through our company-owned retail stores, which carry higher prices and margins.

As for our view of the manufactured housing industry, overall the industry is continuing its - excuse me, continuing its incremental recovery, but remains well below long-term averages. We certainly see an opportunity for continued demand and growth for the industry, especially with the need for affordable housing and the potential for a rising interest rate environment. It typically spurs growth in our industry.

We did see some softening in certain key markets at the end of 2018 mainly in Texas and Louisiana with respect to sales through our independent dealers even accounting for seasonality. Some of the softness in these areas was likely impacted by weather related events. However, we remain optimistic on the demand for our products in our markets.

On the retail side, we opened three new company-owned stores in December of 2018, two in Georgia, one in Texas. We continue to see abundant opportunities with our retail stores especially with the higher margins available and the potential for greater financing capture rates. But we are taking a cautious and analytical approach in growing out that side of the business. We're taking a look at what has worked and what has been less successful in our retail efforts, so that we can create a uniform effective and efficient rollout and expansion process for company and stores.

We're also excited about the potential we see in new park developments that we're involved with. The two projects I would highlight are a 400-plus acre parcel that we purchased last year near Austin, I think we bought it for $4 million, and another new development in San Antonio which we've bought for about $900,000. We're buying the land only and working with joint venture partners to develop these out.

We foresee - as I said in the roadshow, we foresee [places to put the] [ph] problem manifesting itself in the next few years and there's a chance for a significant return on investment with these projects. Although we don't think the results of these projects will be readily evident on our income statement for another 12 to 24 months.

To give some framework of how we structure these deals, not only do we finance the acquisition development of these new communities, including a 10% to 12% rate of return, but we also get a commitment from the developing party to install our products on most or all of the site pads development.

With that - excuse me, with that overview, I will now turn the call over to Jeff Burt to discuss the financials in more detail. Jeff?

Jeffrey Burt

Thank you. As Curt alluded to, we had strong revenue growth in 2018. We grew our revenues by 26% year-over-year raising our net revenue in 2018 to $161.8 million. This was driven by strong growth in product sales going from approximately $110 million to $139 million.

Our company-owned retail store sales increased by 27% in 2018 going from $10.4 million in 2017 to $13.2 million in 2018. The cost of product sales increased $24.7 million to $107 million, which was a 30% increase. This was largely attributable to greater volume of production, increased material and labor costs and the cost with expanding our retail operations.

We also saw a 22% increase in SG&A expenses to $21 million. These expenses increased due to the cost of association - associated with expanding our operations of our retail stores. The expenses of opening a new corporate office, opening a new sales office, as well as the cost associated with the IPO.

Our profit margins associated with our product sales was 23% which was in line but slightly lower than the 25% margin we experienced in 2017. This was due to increased material and labor costs, as well as the costs of rolling out and expanding our retail stores.

Income before 2000 - income before taxes in 2018 was $30.6 million, an increase of 16% from $26.4 million in 2017. After a change in the operating structure of the company from the partnership in 2017 to a corporation in 2018, income tax expense for 2018 was $8.7 million compared to only 124,000 in 2017.

Net income was $21.5 million in 2018 compared to $26.3 million in 2017. However, on a pro forma basis accounting for the additional tax expense associated with converting from a partnership to a corporation in 2018 the pro forma net income in 2017 was $16.9 million if the company had not been a pass-through entity in 2017. On a pro forma basis, so that we're comparing apples-to-apples that would be a 27% increase in net income from 2017 to 2018.

We continue to see our financing operations provide steady growth. Our consumer loan portfolio increased by $10.5 million in 2018 to $97 million inclusive of the allowance for loan loss and other discounts.

Our manufactured home park loan portfolio increased by $8.4 million in 2018 to $58 million. From 2017 to 2018 the interest income on our portfolios grew by more than $3.1 million which was close to 20%.

As of December 31, 2018 we had a borrowing capacity of $51.3 million between our two revolvers which gives us - excuse me, gives us substantial room to expand our financing operations as needed and appropriate.

Lastly, equity grew to approximately $190 million as of December 31, 2018, up approximately $66 million from the 2017 balance. Curt, that completes our financial report.

Curtis Hodgson

Thanks, Jeff. While Kenny and I are pleased with our overall growth, we acknowledge that we have a lot more work to do, especially digesting the systems necessary to be a public corporation.

Our near-term focus begins on internal opportunities, but we're going to continue to evaluate acquisitions and opportunities if it makes sense for the company and for our shareholders. We think we're well-positioned in the next few years to grow the company and to continue to expand our distribution channels, grow our loan books and generate attractive returns for all our stakeholders. We'll now take questions and answers.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Alex Rygiel with B. Riley FBR. Your line is open.

Alex Rygiel

Curt, Kenny, Neal and Jeff, congratulations on everything you accomplished in the fourth quarter last year.

Curtis Hodgson

Thank you.

Kenneth Shipley

Thank you.

Alex Rygiel

Curt or Jeff, if we could just address kind of the hot topic today and that is can you talk a little bit about why the 10-K was delayed and when we might actually see a 10-K?

Kenneth Shipley

Jeff, go ahead take that.

Jeffrey Burt

As we transitioned from the partnership operating entity to the corporate operating entity and we bring all of the resources online to be a public company we wanted to make sure everything was right for our opening to the public.

We may have been overly cautious making sure that everything fit into place. But we hired a number of resources and got them online and we missed the window by about 10 days.

Curtis Hodgson

Let me put a little color on it. This is Curt. I think everybody is wanting to know the answer to this question. There was no disagreement, no controversy between us and our auditors that caused this delay. It was just housekeeping schedules and so on and so forth that had to be done to file our first 10-K. It had nothing to do with any - any issues between us and our auditors Grant Thornton.

Alex Rygiel

It’s helpful. And now that the first quarter is mostly wrapped up…

Curtis Hodgson

Anyway we will be filing that today.

Alex Rygiel

Excellent. Now that the first quarter is wrapped up, Curt, can you give us a little bit more color on how the quarter developed either month-to-month or in its entirety?

Curtis Hodgson

Yeah. Let me give you an overview of things going on, not just with Legacy, but with the industry as a whole. I'm sure most of you are familiar with the MHI's statistics that show a softening in the markets, particularly in Texas and Louisiana which we - which we operate in and that December sales year-over-year were down, I believe December shipments were down here in those regions year-over-year by about 30%. And of course, we’re part of that - that tide, this rising or falling depending on what's going on.

That said, Legacy has not missed a day of work. We have a good order backlog still today. We were operating at or near capacity, all three of our facilities for every day of the first quarter, which is kind of how I judge whether or not we're winning or losing.

In fact, the second quarter is pretty well spoken for from a production point of view as well. So we are outperforming our competitors I think as far as backlog and operating at or near capacity in our in our plants.

That said, we still have a shipment problem. At the end of the first quarter we had 400 plus units that were manufactured and had customer’s names on them, but had not been shipped. That shipment problem is not so much a trucking capacity, but a problem that the customer is not ready for the delivery like they thought. And generally they tend - they tend to say, well, I don't have room or the weather’s gotten to be bad, or I'm not ready for that house yet. So we maintain the house before we ship it and we charge in storage in doing so.

But I'm a little bit taken aback by having 400- plus finished units in our yards unshipped but yet having a firm order on at the end of the period. Jeff may or may not know the top line number. But I mean really it would be hard to have a higher top line given our production limitations than what we - than what we have and what we will be showing for the first quarter, I know that’s little guidance.

And as far as the industry as a whole the only barriers we have to – to the industry growing our interest rates and places to put interest rates declined for 30 year mortgages significantly in the last quarter. And that is not exactly what we’re hoping for from a tailwind point of view. That makes a site-built housing more competitive relative to our housing since our interest rates tend to remain the same [while][ph] ordinary houses, site-built houses fluctuate. I don't know Jeff do you have a feel for what the top line looks like for the quarter.

Jeffrey Burt

The preliminary analysis indicates that we're up about 11% over the ‘18 quarter. However we continue to struggle with the accounting for the houses in the yard. So we have houses that people have actually paid for. And given this is we’re nine days into the month we're fine tuning, we can't recognize the revenue on those that are in the yard.

So we're eliminating those sales from the numbers, but the preliminary numbers indicate we're up 11% over the - from the ’18 quarter to the ‘19 quarter.

Alex Rygiel

Jeff is that in units or dollars?

Jeffrey Burt

Dollars.

Alex Rygiel

Dollars. And then of those 400 units you briefly mentioned it, but how many of those are tagged as sold to the end home buyer versus being shipped to an independent dealer?

Jeffrey Burt

I know…

Curtis Hodgson

I’ll chip in on that. Almost all of our sales are not tagged to the end user. In fact, from a legal point of view manufacturers aren't even allowed to sell to end users. We sometimes put a customer's name on them when it's ordered. My feel is the vast majority of it was tagged for independent retailers and mobile home parks.

When I walk the line I can tell by looking at units whether or not they are special order for a consumer or their staff. Because consumers generally want more things than stock units and I am pleased by what I'd say is a increase in special order units. Those are usually high margin units, as opposed to stock units when I walk the line.

But when I say that maybe I'm seeing 15% or special order, as opposed to traditionally maybe 10%. So the demand from a special order point of view seems to be on the way up.

On the independent retailer side, we continue to see softening of independent retailers. The independent retailers are being [gobbled] [ph] up by our competitors. So there aren’t as many independent retailers. And so we're having to further our distribution through company-owned stores and through sales to mobile home parks.

Alex Rygiel

And just one clarification, you've mentioned a couple of times that customers are not ready for the units to be shipped. What could cause the customer not to be ready for a unit to be shipped?

Curtis Hodgson

If it's going into a park they may not have the site ready, so their development of the site could be behind schedule, which oftentimes happens in the first - fourth and first quarter because of weather issues.

If it's going to an independent retailer, his sales may not have been as robust as he anticipated when he ordered it and he may just want to clear out his - I don't know what's happening with the independent retailer side. Kenny, I think he may have a feel for how the first quarter was – Ken, you want to chip in?

Kenneth Shipley

Yeah, I'll be glad to Curt. You know, a lot of the retailers they just - we were at [indiscernible] and had a pretty good show. I think Alex, I ran across Alex there and a lot of the - a lot of the independent dealers were saying that they just could - they didn't have room on their lot. They hadn't been able to deliver anything.

I had a couple of guys from Houston who said they hadn't been able to deliver a house in 90 days because of the weather. So many of them came – you know, when they ordered the houses and we had a 12 or 13 week backlog, they never - they never dreamt that they'd be shut down for 90 days waiting to truck deliver houses and that's - so they hadn't been able to take anything, but they - because they had been able to deliver anything.

I mean, we've got to get permits to move these things up and down the highway, as well as the site being ready and some of them hadn't - hadn't even got their sites ready because of the - because of the rain. We had a couple of sites that we did up in Louisiana, our sale for one of our company stores and he got washed, the sites when we do the pads to place the model home on it. They actually got washed away before we could get the house delivered. So we had to go back and redo the pads after drying out.

Alex Rygiel

That's helpful. Curt, you've talked to some extent in the past about community development, park development. I believe you own two or so plots of land and you're a lender on a few others. Could you run through each one of those again and maybe even kind of bracket the size of each one and the anticipated sort of first date of sale or revenue opportunity that each one could bring?

Curtis Hodgson

Sure. I mean, I'm doing it. I've stopped my head. I don't have any prepared notes on this, but there are so few of them I'm familiar with all of them. The first one coming online is one we're financing with one of our better dealers in Fort Worth. He's developing about a 100 unit subdivision and it is obligated to be filled with Legacy housing as part of his development. And he is probably only 90 days away from taking its first houses in that subdivision.

The biggest project which we talked about earlier is a 400-unit...

Jeffrey Burt

We did deliver one there.

Curtis Hodgson

All right. So he's already taken one. I didn't know he's already legal to do that. But the 400-unit, 400 acre subdivision in Austin area is really near Austin. In fact, its near the Formula One race track, the southern part of Austin, really gorgeous land. I would guess we're up probably $2 million in market value on the purchase and I know I misspoke - I supposed to opine on that, but okay. So my first mistake as a public corporation chairman.

But - and we are about halfway through the engineering stages. We could require a water treatment plant which in Texas is about a one year lead time just from application on the water treatment plant. I would guess that we'll be breaking ground in that this year and we'll see significant revenues in the year 2020 on that.

Then the third one is some land that we own that were the principal on. But in their joint venture with either San Antonio it's going to be around 120 unit subdivision. So a little behind, but it doesn't have the water treatment plant, it's subject systems. So I imagine that will be online first quarter of next year.

And then we are financing some land in a different part of San Antonio that we are the lender on. And I don't know what the horizon on that, it seems to be going slower than I expected.

We're in negotiations right now on land in the West Houston area and on a parcel [ph] in Miami, Florida that seems to be a unique parcel. But from the land point of view slow going, but I really think that the places to put an issue is going to be so significant for our competitors if they're going to get caught with very little market if they don't do what we're doing, so.

Alex Rygiel

One last question, Curt or Jeff, or even Kenny, can you comment on how your loan book might have changed in the first quarter, or how to keep - what characteristics may have looked different for the buyers and how that - anything has changed, if anything has changed in sort of the first quarter of ‘19 here?

Curtis Hodgson

There's two loan books that are significant the consumer loan book in the Mobile Home Parks loan. The consumer loan book hasn't changed much at all. I don't think Stuart [ph] is on the call, but we had a conference call with him yesterday and we just got a slow grower there. We're growing the loan book at a 10% to 15% annual clip by adding loans to it.

Almost nothing has changed in that other than we keep getting more loans. We're generating 40, 50 loans a month and that loan book has positive cash flowing as it is, it takes in more cash monthly than it puts out.

The second loan book which is the Park loan book has been very volatile the last couple of quarters. Jeff, you want to chip in on that.

Jeffrey Burt

We have. We've seen significant upswing in the booking of the loans for the Mobile Home Park. Now at the end of - at the end of 2018 I think our MHP portfolio of loans was roughly $58 million, end of the quarter for March of 2019 were up to $67 million, even after we've taken some significant payoff.

So for the first quarter and 2019 compared to the first quarter in 2018 it was up approximately $7.5 million.

Curtis Hodgson

Georgia in particular is penetrating the park market even better than we expected. They're probably selling 60%, 70% of their production to parks in the southeast all the way from Kentucky on the north side to Florida on the south side and doing a remarkably good job. We've been building a steady five a day in Georgia which is up considerably year-over-year. I think we're at three or four day a year ago in Georgia or so.

Alex Rygiel

All very helpful. Thank you very much, gentlemen.

Operator

Thank you. And our next question comes from the line of Mark Smith with Oak Ridge Financial. Your line is open.

Mark Smith

Hi, guys. First off Curt, can you give us a repeat on some of the product numbers during the year or during fourth quarter, as well as average selling price. And any insight into how that was moving in fourth quarter maybe versus a year ago?

Curtis Hodgson

You know, our plan is to continue to find ways to raise per unit pricing either by making nicer product or by selling more of it retail. So when we have a - we had at 38,000 to 41,000 price increase year-over-year which Jeff already reported, which was up a little bit more than our cost of developing product.

Our materials are up nominally year-over-year. our labor is up more significantly. So probably our cost of making the same exact product is up. I was just guessing somewhere in the 4% range, but yet our cost of what we're selling is up closer to 8% or 9%.

So that improvement in top line per unit basis is continuing. We have not had a price increase in almost six months mostly because if you are following a commodity mark, as lumber had a significant decline beginning of that six months ago. So we were saving money - that number one component of manufacturing lumber. And so therefore did not take a price increase, although I think that will probably be going. We'll probably have a across the board price increase shortly.

We also are managing labor better. Our labor numbers in Georgia are the best ever, like under $5 a square foot to build a house and in Fort Worth, they've been steady to improving lately. The challenge in one of our plants in Tom Ridge [ph] we're trying to work through that from a labor point of view.

I don't know if that answered your question, but thus far we'll be introducing some product changes that are product options that will increase the overall - increase the price of what we sell mostly by delivering a nicer product to the consumer.

Mark Smith

Okay. No, that's helpful. And then second, can you speak to a year ago you guys had really strong sales in FEMA homes. Is there any FEMA business that's happening now or any other things that kind of add lumpiness to sales that we should be looking at?

Curtis Hodgson

I was hoping somebody would ask about that. And I think there's 20 plus people on this call. And I think we probably need to admit that Hurricane Harvey and Hurricane Irma 18, 19, 20 months ago was a big shot in the arm for the industry. It were both category for hurricane that both smack dab in the middle of our market areas and the hurricane here in Texas was so severe, the flooding caused a huge need for housing which FEMA stepped up and bought I think 8 or 10,000 units that we all participated in that - that uptick in business.

When I look to the number that we delivered for the fourth quarter and top line I wasn't that happy with it because it was a little less than what we all had hoped for. However, want to go back and look at our pre-hurricane numbers, pre-Harvey and pre-Irma, our fourth quarter was higher than any of those quarters. It was the highest quarter on record before Harvey and before Irma. So in essence I was not that dissatisfied.

The short answer to your question is with the flooding that has occurred and with the small hurricane that was – that hit last year in one of our markets there were absolutely no FEMA orders that came out because of those events. And we don't see any in the near future unless there is some catastrophe that has not yet happened.

Mark Smith

Okay. And then lastly can you just give us more of an update on your retail store strategy. I know that you maybe are slowing things down and trying to do things prudently here. Can you talk about how some of these new sites are doing out of the gates now that we're about a quarter into it?

Curtis Hodgson

Kenny?

Kenneth Shipley

I'm sorry. I was reading something. Could you repeat that question?

Mark Smith

Yeah. Can you just give us an update on the retail stores that the company owned ones that you guys have, especially those that opened late in the year and how those are doing so far?

Kenneth Shipley

Yes. I really think we've turned a corner. You know, we’re just like all the other in the past. We've had some - we've had some weather issues to get around, especially the stores up in the Southeast they got just hammered with weather, every time we was - every time we were trying to ship houses it was just raining.

And so we had a pretty good month last month and it's looking better. It's all - it's all a people business. So we're changing people every day and trying to get a more experienced crew in there for sales, but this sale seems to be – you know, not only when this weather slowed our deliveries, but it also slows down traffic. So it's been a trial in first quarter for us to get these things going and so we - I think we start to turn the corners here, we start to get some numbers out and...

Curtis Hodgson

And let me be a little bit - let me be a little bit objective on this guys. Our stores, we have about 11 of them operating. Have been selling approximately two per month, which is actually a losing proposition. It's a drain on earnings, but many of these stores are in their early stages of development and we're expecting to get them to four to five per month, six per month, which makes them significantly profitable and gives us a distribution leg.

It's been harder to accomplish those numbers than we would have liked. And Kenny has been spending a lot of his time on that mission since he's the world's best retailer. I think he's going to pull it off here and that will eventually get these stores where they're contributing to profitability rather than drag it down.

Starting a store is a - it's not just a decision, it's a process. It can take six months, 12 months before you turn the corner. So we have a lot of these that are on the beginning of turning the corner. We've had to change manager sometimes three and four times because they just don't get the process. It's more challenging than we hoped.

Mark Smith

Okay. That's helpful. Thanks, guys.

Operator

Thank you. Our next question comes from the line of Ian Ellis with MicroCapital. Your line is open.

Ian Ellis

Good morning, gentlemen. Would you just be kind enough to clarify the 11% year-over-year numbers for the Q1? Is that revenues or units. And what's the year-over-year comparison? So I don't think that's been disclosed publicly yet.

Jeffrey Burt

That revenue.

Ian Ellis

Revenue. So what was the year ago number, what was Q1, 2018?

Jeffrey Burt

I don't have that in front of me. I've got an excerpt [ph] that I'm looking at along with that. So for 2000…

Kenneth Shipley

Q1 for 2018 was $37 million.

Ian Ellis

$37 million, okay…

Kenneth Shipley

$37 million…

Curtis Hodgson

So we're looking at above $40 million for Q1 revenues 2019?

Jeffrey Burt

Curt, I think that was fourth quarter, Curt.

Ian Ellis

I'm sorry.

Jeffrey Burt

I think that number was the fourth quarter. I'm showing the first quarter at 24.4.

Curtis Hodgson

24.4, so we’re looking at - so we're looking at…

Ian Ellis

I think you’re looking at - you're looking at first quarter 2017 Jeff.

Jeffrey Burt

Oh, my God, you're right. I'm sorry. You're right.

Ian Ellis

So I can wait for you to get the right number.

Jeffrey Burt

Yeah, I'm sorry, it's 34 - he's right, it's 37.4.

Ian Ellis

37.4. Okay, thanks, gentlemen. Bye

Curtis Hodgson

Which was a three month quarter, and so are you seeing Jeff 11% less than that, is that what you're projecting?

Jeffrey Burt

No, I am showing 11% more than that.

Ian Ellis

Okay. So you're saying 11% more than that, obviously above $40 million. Does that include the 400 units you've got in your yard or not include the 400 units you've got in your yard?

Jeffrey Burt

Well, I looked at those numbers this morning as I was - I was thinking that that was relevant Ian and they may include part of them. But our yard inventory - our finished goods inventory, unshipped finished goods inventory at the end of the year was about 350 units system wide right, and the first quarter was about 400 units system wide.

So while I was hoping it would decline it actually went from 350 to 400 units. So 50 units, let's just say that's probably $2 million worth of product increased, finished good inventory is still on ship to the yard, so it could be a $2 million swing one way or the other depending on how we're counting and I guess.

Ian Ellis

Okay. So, all right. So all and we've got a range here on Q1 revenue depending on how you account for those of - you know, $38 million to $41 million, is that correct?

Jeffrey Burt

That's correct.

Ian Ellis

Okay. All right. Now that’s helpful. Thank you, gentlemen.

Operator

Thank you. And I'm showing no further questions at this time. I would not like to turn the call back to Mr. Curt Hodgson for closing remarks.

Curtis Hodgson

Well, that was pretty paint painless. Gentlemen, thank you for asking those questions and letting me give some color to it. On a adlib basis because as you know these remarks are usually prepared. So let me read the prepared remarks to finish the call. As you know Kenny and I are both accessible anytime you want to find us we do have a way of answering our self. While I'm pleased that our overall growth from 2017 was – for 2017 and ‘18 was good. I do think we'll have growth from 2000 - growth in 2019 as well. So thanks for attending the call and with that I'll end it.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day.